Meant to encourage the use of solar panels, Net Metering is a special billing arrangement available to California utility customers. The NEM program allows customers to receive a credit for the full value of electricity generated by their home solar power system. Net Metering 2.0 refers to recent changes to the original Net Metering program, which we will explain below.
What Is Net Metering?
Net Metering is essentially a measurement of the difference of how much solar power is being used throughout the day and how much energy is being drawn from the grid. Customers will continue to get paid for any surplus with Net Metering 2.0. The special billing program has made California a prime location for solar-powered homes in the United States.
Shift Towards Time-of-Use Rates
Net Metering 2.0 will require customers to shift to time-of-use rates rather than a flat rate for all surplus solar power produced. It’s a move spurred in part by pressure from utility companies to put rates in line with real-time costs associated with producing and transmitting energy throughout the grid. Utility companies have argued that the initial metering programmed unfairly pushed added costs along to non-solar customers.
Initial Support from Solar Groups
Solar groups have offered tentative support for the adoption of what’s been termed “fair metering.” Some groups would prefer that the rate adjustments be phased in at a more gradual pace. The California Public Utilities Commission is still working out details of how implication of the changes would work.
Reduction in Non-Bypassable Charges
Net Metering 2.0 changes also include adjustments to charges passed along to new net-metered customers. Some non-bypassable charges would also be reduced. For instance, new customers to the program wouldn’t have to pay transmission fees. The adjustments would lower the average cost of solar systems to approximately two to three cents per KWh, a drop from the current four to five cents per KWh.
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